carlos-torres

Home-Price Drop in U.S. Supports Fed’s Low-Rate Outlook: Chart of the Day

by on March 2, 2010

By Anthony Feld and Carlos Torres March 2 (Bloomberg) — A possible relapse in home prices that had Fed policy makers concerned late last year may now be coming to pass, underscoring forecasts by economists such as Jan Hatzius that an interest-rate increase is a long way off. The CHART OF THE DAY graphs median home prices for existing and new houses. At $163,600 in January, the median cost of an existing single-family home was the lowest since May 2002, figures from the National Association of Realtors showed last week. For new houses, the $203,500 median price was at a six- year low, according to data from the Commerce Department. “We are likely to see some downward pressure on home prices in 2010,” said Hatzius, chief U.S. economist at Goldman Sachs Group Inc. in New York. Hastening the decline, he said, will be the June 30 expiration of a government tax credit for homebuyers and the lapse later this month of the Fed’s mortgage- debt purchase plan aimed at keeping a lid on borrowing costs. Hatzius is among economists anticipating the Fed will keep its benchmark interest rate near zero at least for the rest of the year. The minutes of the Fed’s Dec. 16 meeting said “some participants still viewed the improved outlook as quite tentative and again pointed to potential sources of softness, including the termination next year of the temporary tax credits for homebuyers and the downward pressure that further increases in foreclosures could put on house prices.” While median prices for existing and new homes are volatile, more stable measures such as the LoanPerformance home- price index from First American CoreLogic, which tracks the same house over time, also showed values declined in the last four months of 2009, Hatzius said. To contact the reporters on this story: Anthony Feld in New York at afeld2@bloomberg.net ; Carlos Torres in Washington at ctorres2@bloomberg.net

See the original post:
Home-Price Drop in U.S. Supports Fed’s Low-Rate Outlook: Chart of the Day

Self Employment in U.S. Climbs, Reflecting Lack of Opportunities in Market

by on February 4, 2010

By Carlos Torres Feb. 4 (Bloomberg) — More Americans worked for themselves in the fourth quarter, another sign of the dearth of opportunities in the job market. Hours worked by the self-employed climbed at an 8.5 percent annual pace in the last three months of 2009, the biggest increase in almost four years, according to data provided to Bloomberg News today by the Labor Department. The gain led to a 1 percent rise in total hours, the first advance since the second quarter of 2007, figures on productivity showed. “Firms aren’t hiring, so people are hanging up a shingle and trying to make it on their own,” said Michael Feroli , an economist at JPMorgan Chase & Co. in New York. “You get this playing out in rough labor markets.” The Labor Department said today that worker productivity grew at a 6.2 percent annual rate last quarter. The median forecast of economists surveyed by Bloomberg anticipated a 6.5 percent increase, primarily because the government’s monthly employment report, which doesn’t take into account the self- employed, had signaled a decrease in the workweek. The gain in the number of hours worked by the self-employed last quarter reflected an increase in the number of people saying they worked for themselves combined with a rise in hours for those already working on their own, the Labor Department said. Self-Employed in Housing The increase may also reflect the thawing of the housing market, said JPMorgan’s Feroli. Mortgage brokers are among the types of jobs in the industry where people often work for themselves, he said. “You have a fair amount of self-employment in the real- estate industry,” Feroli said. The issue may also help explain why unemployment has stabilized. The jobless rate , calculated from a Labor Department survey of households that covers the self-employed, was 10 percent in December, the same as a month earlier. The rate was probably unchanged again in January, according to the median forecast of economists surveyed before the government’s report tomorrow. The number of people working on their own rose by 126,000 in the fourth quarter, separate figures from the Labor Department showed. To contact the reporter on this story: Carlos Torres in Washington at ctorres2@bloomberg.net .

Go here to read the rest:
Self Employment in U.S. Climbs, Reflecting Lack of Opportunities in Market

Pending Sales of Existing U.S. Homes Increase 1% Following Record Decline

February 2, 2010

By Carlos Torres Feb. 2 (Bloomberg) — The number of contracts to buy previously owned U.S. homes was little changed in December after a record plunge, indicating a renewed tax credit will take time to revive sales. The index of purchase agreements, or pending home sales, rose 1 percent after a 16 percent drop in November that was the largest since records began in 2001, the National Association of Realtors announced in Washington. Compared with a year earlier, pending sales rose 11 percent. Demand jumped last year as first-time buyers rushed to qualify for an $8,000 government incentive due to expire Nov. 30. The subsequent renewal and expansion of the initiative may help underpin sales, cushioning the damage from mounting foreclosures and a possible increase in mortgage rates as Federal Reserve policy makers withdraw from the market. “We’ve had a lot of volatility because of the tax incentive,” said David Sloan , a senior economist at 4Cast Inc., a New York forecasting firm, who correctly projected the increase. “We’re in a moderately improving underlying trend. There is some pent-up demand for housing from very weak levels. Housing will be a source of support for the economy in the coming year. Things will slowly get better.” The gain in December matched the median forecast of 35 economists in a Bloomberg News survey. Estimates ranged from a drop of 3.2 percent to a 6 percent increase. Builder Shares Builder shares rose after D.R. Horton Inc. , the second- largest U.S. homebuilder by revenue, reported its first quarterly profit since 2007 as sales rose and the company booked a tax benefit. The Standard & Poor’s Supercomposite Homebuilder Index climbed 4.9 percent at 10:15 a.m. in New York. The broader S&P 500 rose 0.3 percent to 1,092.9. The Realtors group’s pending sales data go back to January 2001, and it started publishing the index in March 2005. Three of the four regions showed increases in pending sales, led by a 5.2 percent gain in the Midwest. Pending sales dropped 3.8 percent in the West. Pending home sales are considered a leading indicator because they track contract signings. The Realtors’ existing- home sales report tallies closings, which typically occur a month or two later. The Realtors group started publishing the index in March 2005, and data go back to January 2001. Existing Home Sales Sales of previously owned houses dropped 17 percent in December, almost matching the record decrease in pending purchases the prior month, the agents’ group reported last week. President Barack Obama and Congress extended the first-time buyer credit in early November to cover deals signed by April 30 and closed by June 30, and expanded it to include some current homeowners. Even so, some economists believe the original measure pulled sales forward, restraining demand for a few months. About 2.4 million households will take advantage of the credit this year, according to a projection by Lawrence Yun , the real estate group’s chief economist. Yun anticipates existing home sales will rise to 5.6 million this year from 5.16 million in 2009. Another provision in the legislation allowed builders to use losses incurred in 2008 and 2009 to recoup taxes on profits going back as many as five years, three more years than usual. Lennar Corp. , KB Home and Ryland Group Inc. are among the construction companies that have reported quarterly profits because of the tax refunds. Expanding, Hiring The government initiative may help Lennar, the nations’ third-largest homebuilder by revenue, expand and hire, according to its chief executive officer. “We can start adding communities and frankly adding jobs, which I think was the import of exactly that legislation,” Stuart A. Miller , head of the Miami-based company said after announcing quarterly results on Jan. 7. Homebuilder shares are outperforming the broader stock market so far this year as investors believe the tax benefit may buy the companies enough time to turn a profit later this year as sales improve. The S&P Supercomposite Homebuilder Index climbed 11 percent since Dec. 31 compared with a 1.9 percent decline for the S&P 500. Fed policy makers last week confirmed their program to purchase mortgage-backed securities, which was aimed at keeping borrowing costs low, will expire by March 31 as scheduled. Mortgage Rates The plan helped push the rate on a 30-year fixed mortgage down to 4.71 percent in early December, the lowest level since Freddie Mac started keeping weekly records in 1972. The rate hovered around 5 percent in the last two weeks of January. Joblessness and foreclosures are other concerns. Unemployment is forecast to average 10 percent this year, the highest level in seven decades, according to the median estimate of economists surveyed this month. A record 3 million U.S. homes will be repossessed by lenders this year, RealtyTrac Inc. forecast on Jan. 14. That is up from 2.82 million in 2009, the most since the company began compiling data in 2005. The drop in prices associated with foreclosures represents a double-edged sword for the industry. Decreasing values bring more properties within reach of buyers, while also prevents current owners from trading up. The agents’ group’s affordability index was at 163.8 in December, compared with a record high 178.8 reached in April. A reading of 100 means a family earning the median income can afford the median-priced home at the current mortgage rate. — With assistance from John Gittelsohn in New York. Editor: Vince Golle To contact the reporters on this story: Carlos Torres in Washington ctorres2@bloomberg.net

Read the full article →

Consumers Played Role in U.S. 5.7% Growth Surge Along With Manufacturers

January 29, 2010

By Carlos Torres Jan. 30 (Bloomberg) — The surge in U.S. economic growth in the fourth quarter depended on more than manufacturing and investment. Households also played their part. Gross domestic product grew at a 5.7 percent annual rate from October through December, more than anticipated and the strongest performance since the third quarter of 2003, figures from the Commerce Department yesterday showed. Consumer spending rose at a 2 percent pace after increasing 2.8 percent the previous three months, reflecting a slowdown in auto sales . Spending cooled after the government’s cash-for-clunkers plan expired in August, ending rebates on trade-ins of older vehicles. Excluding autos, consumer spending increased at a 3 percent rate last quarter, the most in three years, indicating the biggest part of the economy was gaining speed. “There was some genuine pickup in momentum over the second half of last year that was slightly obscured by ‘cash for clunkers,’” said Samuel Coffin , an economist at UBS Securities LLC in Stamford, Connecticut. “There will be no huge venting of pent-up demand, but continued momentum” in spending. The increase is being fueled by growing incomes rather than a decrease in savings, signaling household purchases can keep expanding in coming months. Amazon.com Inc. is among companies projecting better times ahead as the world’s largest economy emerges from the recession. Economists anticipated the economy would expand at a 4.8 percent pace in the last three months of 2009, according to the median of 84 estimates in a Bloomberg News survey. Consumer spending, which accounts for about 70 percent of the economy, was projected to grow at a 1.8 percent pace. 2009 Slump For all of 2009, the economy shrank 2.4 percent, the worst single-year performance since 1946. Household purchases dropped 0.6 percent last year, the biggest decrease since 1974. Spending excluding autos picked up from a 1.6 percent gain in the third quarter and a 0.7 percent drop in the previous three months, according to Bloomberg News calculations. Yesterday’s report showed pay for those still employed grew. Incomes rose at a 4 percent pace in the last three months of 2009, the most since the second quarter of 2008. Wages and salaries climbed 2.2 percent, the best performance in two years. Amazon.com , the world’s largest Internet retailer, said on Jan. 28 that sales may rise as much as 43 percent in the first quarter compared with the same time last year, beating analysts’ estimates. The Seattle-based company’s shares more than doubled last year. Shares Fall Stocks dropped yesterday, depressed by disappointing results at technology companies including Microsoft Corp. The Standard & Poor’s 500 Index fell 1 percent to close at a two- month low of 1,073.87. Efforts to rebuild inventories and gains in business spending on new equipment provided the biggest boosts to growth last quarter, the Commerce Department report showed yesterday. Stockpiles dropped at a $33.5 billion annual pace following a $139.2 billion decline the previous three months. Inventories declined at a record $160.2 billion pace in the second quarter. The smaller slide added 3.4 percentage points to GDP. Purchases of equipment and software increased at a 13 percent pace in the fourth quarter, the most since 2006, yesterday’s report showed. The gain helped offset a 15 percent drop in commercial construction, leaving total business investment up 2.9 percent over the past three months. ‘Sustainable’ Recovery “We are getting on to something that is pretty sustainable,” said Bruce Kasman , chief economist at JPMorgan Chase & Co. in New York, who correctly forecast the gain in GDP. “Both consumers and businesses are beginning to increase spending. To get validation, we need to see a return in hiring, which we think we are going to get over the next few months.” Rising investment is boosting sales at companies including Intel Corp. and may help bring the jobless rate down from close to a 26-year high as employers add staff to meet demand. Intel, the world’s largest chipmaker, posted its biggest quarterly revenue in more than a year last quarter, a sign the computer industry has emerged from last year’s global recession. President Barack Obama said the GDP report “affirms the progress” being made because of government actions to pull the nation out of a recession. “There’s still a big hole we have to fill,” Obama said yesterday after touring a small manufacturing company in Baltimore. An additional boost is needed from tax breaks for small businesses that should be part of legislation from Congress, he said. The U.S. has lost 7.2 million jobs since the start of the recession in December 2007, the most of any slowdown in the post-World War II era. The jobless rate held at 10 percent in December. To contact the reporter on this story: Carlos Torres in Washington at ctorres2@bloomberg.net

Read the full article →

Goldman Sees `False Bottom’ in U.S. Housing While Merrill Sees a `Treat’

October 27, 2009

By Carlos Torres Oct. 27 (Bloomberg) — The stabilization in U.S. home prices won’t last, according to economists at Goldman Sachs Group Inc. in New York. Their counterparts at BofA Merrill Lynch Global Research see a “treat” rather than a retreat. “The risk of renewed home price declines remains significant,” Alec Phillips , an economist based in Goldman’s Washington office, said in an Oct. 23 note to clients. “Our working assumption is a further 5 percent to 10 percent decline by mid-2010.” “We should expect subdued home price appreciation over the next few years,” wrote Merrill Lynch’s Ethan Harris and Drew Matus on the same day. Both camps agree government stimulus programs, including the $8,000 first-time buyer tax credit, foreclosure moratoria and Federal Reserve purchases of mortgage-backed securities, have helped stem the slump in housing. At the center of the debate is how much influence these initiatives have had, and therefore what happens after they expire or wane. On the supply side, the programs have reduced the number of foreclosed houses reaching the market by about 450,000, according to Goldman calculations, said Phillips. They have also boosted sales by about 200,000 homes, he said. ‘Temporary Factors’ “Taken together, these moves might have added 5 percent to home prices nationally,” Goldman’s Phillips wrote. “If this estimate is correct, it suggests that most of the increase in home prices since this spring — which has totaled between 2 percent and 4 percent in seasonally adjusted terms — has been due to temporary factors.” The latest reading on one of those measures came today. The S&P/Case-Shiller index covering 20 U.S. cities climbed 1 percent in August from the prior month, the third consecutive increase. The measure was down 11.3 percent from August 2008, the smallest 12-month decrease since January 2008. Combined sales of new and existing homes totaled 5.52 million at an annual rate in August, up 15 percent from a January low, according to figures from the Commerce Department and the National Association of Realtors. Purchases of previously owned houses jumped 9.4 percent in September, the most since comparable records began in 1999, the real estate agents’ groups reported last week. Figures on September sales of new houses are due from the Commerce Department tomorrow. “Much of this strength seems to have been policy- induced,” Phillips wrote in a section of the report titled: “A False Bottom?” Halloween ‘Treat’ “While tax credits and distressed property sales may be influencing both sales activity and prices, they are not the primary force behind the rebound in housing,” Merrill Lynch’s Harris, head of North American economics, and Matus, a senior economist, wrote in a Halloween-themed report that likened the improvement to a “treat.” Halloween is the Oct. 31 celebration in the U.S. when children go door-to-door “trick-or-treating.” They wear costumes, ask for sweets and play pranks. Home prices have fallen so much that prospective buyers no longer expect them to drop much further, said Harris and Matus, citing results of a question asked by the Reuters/University of Michigan survey of consumer sentiment . ‘Dramatically’ Affordable The price drop has also made homes “dramatically” more affordable , they said. “This combination of factors has created enough renewed demand to offset the ongoing negative impact of rising unemployment and foreclosures,” Harris and Matus said. The improvements will only lead to “subdued” price increases over the next few years because of “the magnitude of the housing downturn and high level of inventories,” the Merrill Lynch economists concluded. The differing views on housing may help explain the banks’ divergent views on the economic outlook. Goldman projects the U.S. economy will grow 2 percent in 2010, while Merrill Lynch forecasts a 3.1 percent expansion. To contact the reporter on this story: Carlos Torres in Washington ctorres2@bloomberg.net

Read the full article →

Goldman’s Tilton Says Fed Has Time to Shrink Balance Sheet as Credit Slows

September 23, 2009

By Carlos Torres Sept. 23 (Bloomberg) — The Federal Reserve has plenty of time to drain the $1 trillion it’s pumped into the banking system because a slowdown in credit and money will restrain inflation, economists at Goldman Sachs Group Inc. said. “The Fed should have quite some time to clean up,” Andrew Tilton , a Goldman economist in New York, wrote in a Sept. 21 report. “The deceleration of broad money and credit growth suggests little risk of inflation in the near term.” Prices are more closely linked to long-term changes in debt and the money supply than to short-term moves in gauges such as bank reserves, Tilton’s research showed. The broader the measure of credit or money, and the longer the timeframe, the greater the correlation with inflation, he said. The policy-making Federal Open Market Committee will hold the benchmark interest rate target near zero through 2010, according to Goldman’s forecast. The central bank’s preferred price gauge, which is tied to consumer spending and excludes food and fuel costs, will fall 0.3 percent in the fourth quarter of 2010 compared with the same period this year, the first drop since records began in 1960, the forecast shows. The Fed’s latest interest-rate announcement is due today at about 2:15 p.m. New York time. Bank reserves , the narrowest measure of money, have surged by 1,890 percent over the last year as the Fed flooded financial markets with extra cash in a bid to stem the worst recession since the Great Depression. Inflation Jitters “Reserve growth is explosive” and that “has been a focal point for market worries about inflation over the past year,” said Tilton. More important is that every measure of money and credit, including the M2 money supply, commercial bank credit and total domestic debt, is now decelerating and will probably continue to slow into 2010 as banks limit lending, Tilton said. The low point in the number of banks saying they are willing to make consumer loans occurred in the fourth quarter of 2008, Tilton said the Fed’s survey of senior loan officers showed. His research indicates that year-over-year changes in credit bottom out more than a year later on average. “The implication is that broader credit growth is unlikely to trough before early 2010,” he wrote. “In the short term, the clearly better correlations exhibited by the slow-growing broader credit aggregates would suggest that inflation pressures are likely to be muted,” said Tilton. “Over the long term, several years or more, rapid money growth could eventually push up inflation if not reversed.” To contact the report on this story: Carlos Torres in Washington at ctorres2@bloomberg.net

Read the full article →

U.S. Recession May Have Ended in June, Goldman’s McKelvey Tells Clients

August 19, 2009

By Carlos Torres Aug. 19 (Bloomberg) — The worst U.S. recession since the 1930s may already be over, according to Edward McKelvey , a senior economist at Goldman Sachs Group Inc. in New York. The gain in industrial production in July, the first in nine months, and the likelihood that output will continue to grow because of depleted inventories is “the best” signal that the contraction is over, McKelvey wrote in an e-mail to clients yesterday. The Business Cycle Dating Committee of the National Bureau of Economic Research , the Cambridge, Massachusetts-based private research group charged with calling turns in the economy, determined the current downturn started in December 2007. A June trough means the contraction would have lasted 18 months, making it the longest since the Great Depression. “The upturn in industrial production reported for July suggests that June could wind up being the NBER cycle low,” McKelvey wrote. The projection was “highly tentative” and “a lot has to happen before we can state this conclusion with conviction,” he said. A gain in gross domestic product this quarter and sustained increases in total sales adjusted for inflation, together with further increases in production, would help cement the verdict, McKelvey said. The NBER committee defines a recession as a “significant” decrease in economic activity over a sustained period of time. The decline would be visible in GDP, payrolls, industrial production, sales and incomes. Cash-for-Clunkers The government’s cash-for-clunkers program is among the reasons production, GDP and sales are all likely to increase this quarter, McKelvey said. General Motors Co. announced yesterday it called back 1,350 union workers, its biggest one-time increase in jobs since 2006, as it boosts second-half production. GM will add shifts at plants in the Canadian province of Ontario and in Lordstown, Ohio. The production changes add about 60,000 units to GM’s fourth-quarter plans, Mark LaNeve , the vice president overseeing U.S. sales, said in a conference call. The job market, which is likely to deteriorate further, is the one component that may not confirm the contraction is over, McKelvey said. For that reason, McKelvey said the task of predicting when recessions begin and end is “counterproductive” since most Americans will continue to feel glum as the jobless rate climbs and payrolls fall. Calling the end of the downturn comes “with considerable misunderstanding — bordering on distrust and disdain — from those who are experiencing recession by their own definition at first hand,” he said. “This is not to say that identifying recessions is pointless, but merely to suggest that a more natural criterion” for determining the length of contractions would be “a period during which unemployment rises significantly,” McKelvey said. To contact the report on this story: Carlos Torres in Washington at Ctorres2@bloomberg.net

Read the full article →

U.S. Recession May Have Ended in June, Goldman’s McKelvey Tells Clients

August 19, 2009

By Carlos Torres Aug. 19 (Bloomberg) — The worst U.S. recession since the 1930s may already be over, according to Edward McKelvey , a senior economist at Goldman Sachs Group Inc. in New York. The gain in industrial production in July, the first in nine months, and the likelihood that output will continue to grow because of depleted inventories is “the best” signal that the contraction is over, McKelvey wrote in an e-mail to clients yesterday. The Business Cycle Dating Committee of the National Bureau of Economic Research , the Cambridge, Massachusetts-based private research group charged with calling turns in the economy, determined the current downturn started in December 2007. A June trough means the contraction would have lasted 18 months, making it the longest since the Great Depression. “The upturn in industrial production reported for July suggests that June could wind up being the NBER cycle low,” McKelvey wrote. The projection was “highly tentative” and “a lot has to happen before we can state this conclusion with conviction,” he said. A gain in gross domestic product this quarter and sustained increases in total sales adjusted for inflation, together with further increases in production, would help cement the verdict, McKelvey said. The NBER committee defines a recession as a “significant” decrease in economic activity over a sustained period of time. The decline would be visible in GDP, payrolls, industrial production, sales and incomes. Cash-for-Clunkers The government’s cash-for-clunkers program is among the reasons production, GDP and sales are all likely to increase this quarter, McKelvey said. General Motors Co. announced yesterday it called back 1,350 union workers, its biggest one-time increase in jobs since 2006, as it boosts second-half production. GM will add shifts at plants in the Canadian province of Ontario and in Lordstown, Ohio. The production changes add about 60,000 units to GM’s fourth-quarter plans, Mark LaNeve , the vice president overseeing U.S. sales, said in a conference call. The job market, which is likely to deteriorate further, is the one component that may not confirm the contraction is over, McKelvey said. For that reason, McKelvey said the task of predicting when recessions begin and end is “counterproductive” since most Americans will continue to feel glum as the jobless rate climbs and payrolls fall. Calling the end of the downturn comes “with considerable misunderstanding — bordering on distrust and disdain — from those who are experiencing recession by their own definition at first hand,” he said. “This is not to say that identifying recessions is pointless, but merely to suggest that a more natural criterion” for determining the length of contractions would be “a period during which unemployment rises significantly,” McKelvey said. To contact the report on this story: Carlos Torres in Washington at Ctorres2@bloomberg.net

Read the full article →

U.S. Recession May Have Ended in June, Goldman’s McKelvey Tells Clients

August 19, 2009

By Carlos Torres Aug. 19 (Bloomberg) — The worst U.S. recession since the 1930s may already be over, according to Edward McKelvey , a senior economist at Goldman Sachs Group Inc. in New York. The gain in industrial production in July, the first in nine months, and the likelihood that output will continue to grow because of depleted inventories is “the best” signal that the contraction is over, McKelvey wrote in an e-mail to clients yesterday. The Business Cycle Dating Committee of the National Bureau of Economic Research , the Cambridge, Massachusetts-based private research group charged with calling turns in the economy, determined the current downturn started in December 2007. A June trough means the contraction would have lasted 18 months, making it the longest since the Great Depression. “The upturn in industrial production reported for July suggests that June could wind up being the NBER cycle low,” McKelvey wrote. The projection was “highly tentative” and “a lot has to happen before we can state this conclusion with conviction,” he said. A gain in gross domestic product this quarter and sustained increases in total sales adjusted for inflation, together with further increases in production, would help cement the verdict, McKelvey said. The NBER committee defines a recession as a “significant” decrease in economic activity over a sustained period of time. The decline would be visible in GDP, payrolls, industrial production, sales and incomes. Cash-for-Clunkers The government’s cash-for-clunkers program is among the reasons production, GDP and sales are all likely to increase this quarter, McKelvey said. General Motors Co. announced yesterday it called back 1,350 union workers, its biggest one-time increase in jobs since 2006, as it boosts second-half production. GM will add shifts at plants in the Canadian province of Ontario and in Lordstown, Ohio. The production changes add about 60,000 units to GM’s fourth-quarter plans, Mark LaNeve , the vice president overseeing U.S. sales, said in a conference call. The job market, which is likely to deteriorate further, is the one component that may not confirm the contraction is over, McKelvey said. For that reason, McKelvey said the task of predicting when recessions begin and end is “counterproductive” since most Americans will continue to feel glum as the jobless rate climbs and payrolls fall. Calling the end of the downturn comes “with considerable misunderstanding — bordering on distrust and disdain — from those who are experiencing recession by their own definition at first hand,” he said. “This is not to say that identifying recessions is pointless, but merely to suggest that a more natural criterion” for determining the length of contractions would be “a period during which unemployment rises significantly,” McKelvey said. To contact the report on this story: Carlos Torres in Washington at Ctorres2@bloomberg.net

Read the full article →

Recession May Have Already Ended, Leading U.S. Indicator Components Signal

July 20, 2009

By Carlos Torres July 20 (Bloomberg) — Components of the index of leading economic indicators are signaling the worst U.S. recession in five decades may be over now, not three to six months from now. Less-known elements of the Conference Board ’s report, including ratios and diffusion indexes, bolster the view the contraction has ended

Read the full article →